Digital transformation as a catalyst: linking green CSR to sustainable development through environmental strategy and innovation in Pakistani SMEs

Purpose This study examines the impact of green corporate social responsibility (GCSR) on corporate sustainable development (CSD) in Pakistani small and medium enterprises (SMEs) by investigating the mediating roles of environmental strategy (ES) and green innovation (GI), as well as the moderating effect of digital transformation (DT). Design/methodology/approach We surveyed 410 managers and employees from diverse SMEs in Pakistan. We used structural equation modelling (SEM) and partial least squares path modelling (Smart-PLS) to analyze the data. Findings The results show that GCSR is positively related to CSD, with ES and GI mediating this relationship. DT positively moderates the relationships between ES and CSD, GI and CSD, and GCSR and CSD. Practical implications The results provide valuable insights for SME managers and policymakers. They suggest the importance of promoting digital adoption and green initiatives to enhance sustainable development. The study offers a framework for understanding how green practices, innovative strategies, and digital technologies can contribute to the sustainable management of SMEs in developing economies. Originality/value This study emphasizes the significance of GCSR practices and effective green strategies that can help sustain the development of Pakistani SMEs and the importance of digital technologies for sustainable development in these enterprises. The results can be useful for SME managers and policymakers as they suggest promoting a context that encourages digital adoption and green initiatives. This study significantly contributes to the literature by thoroughly examining the interaction of GCSR, ES, GI, and DT within a developing economy, while also offering practical insights for the sustainable management of SMEs.